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Financial Planning when a Family Member has Special Needs

June 25, 2019

Elder Law, Estate Planning

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Financial planning when a family member has special needs requires additional attention.

Financial planning is tricky enough, but planning when a family member has special needs requires even more attention. If you fail to provide any funds or support for a family member with special needs, his future may be left to a judge, and his well-being could suffer. If you leave too much, he could be ineligible for government services or be forced to pay back the state for some of his care.

SF Gate’s recent article, “Financial planning when a family member has special needs,” says the biggest mistake you can make is not planning at all. That frequently happens when caregivers become so overwhelmed that it prevents them from planning at all. However, it doesn’t have to be a major undertaking in every case. A young family may just need some life insurance and a basic estate plan, as needs can change over time.

The article says that if you do only one thing, you should write a letter of intent. This letter details a family’s hope for the individual. It tells of your vision for the child or family member’s life – who will be involved and how. This letter of intent can also include crucial information about medical and financial information, as well as other essential information, such as your loved one’s daily routine, and his likes and dislikes.

You should update this letter of intent annually. All the money in the world can’t provide the information parents may have in their hearts and minds for their children. Best of all, it’s free to create.

Every family’s circumstances are unique, so it can be very confusing to understand what’s needed for your particular situation. Seek help wherever you can. Ask other families with special needs for their input and consider taking any free training offered by advocacy or support groups.

Financial planning when a family member has special needs is a situation where a paid professional, such as an elder law attorney or a lawyer who specializes in disability law, can be critical.

Your elder law attorney and your financial advisor will be invaluable members of your advisory team. They can educate you about the finer points of the various financial tools available, like special needs trusts, ABLE accounts, and more. Commonly used financial tools, such as life insurance and Roth IRAs, take on new weight for families in this situation. And experienced attorney will have special knowledge on the implications the various tools will have on taxes, government benefits and more.

Finally, don’t forget to look after your own financial well-being. If you don’t take care of yourself, you won’t be able to provide for your family.